The Federal Trade Commission, along with 19 federal, state, and local law enforcement partners has launched a nationwide crackdown on scams that target consumers with fake promises of income and financial independence that have no basis in reality.
The impact of these scams has intensified as scammers take advantage of the COVID-19 pandemic and financial crisis, the FTC said in a news release.
Called “Operation Income Illusion,” the crackdown encompasses more than 50 law enforcement actions against the operators of work-from-home and employment scams, pyramid schemes, investment scams, bogus coaching courses, and other schemes that can end up costing consumers thousands of dollars.
Income scams have a massive effect on consumers, according to a new analysis of FTC complaint data. Consumers have reported to the FTC that they lost more than $610 million to these scams since 2016, with reported losses of more than $150 million in the first nine months of 2020. The income scams that the FTC has pursued through its law enforcement actions in this sweep collectively bilked over a billion dollars from consumers.
“Scammers are preying on the unemployment and anxiety arising from the pandemic by making false promises of big income working from home,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection. “If someone promises you guaranteed income, but then tells you to pay them, tell the FTC right away so we can work to shut them down.”
How to Avoid Income Scams
Some of the schemes targeted in Operation Income Illusion had a noted impact on one or more specific groups: students, military families, people on a limited fixed income, immigrants, Black Americans, Latinos, the deaf and hearing loss communities, or older adults. A new analysis explores what groups of consumers were most likely to be affected in certain FTC income scam actions.